TechDogs-"BILL Reports Fourth Quarter And Fiscal Year 2023 Financial Results"

Financial Technology

BILL Reports Fourth Quarter And Fiscal Year 2023 Financial Results

By Business Wire

Business Wire
Overall Rating
  • FY23 Total Revenue Exceeded $1 Billion
  • Q4 Core Revenue Increased 33% Year-Over-Year
  • Q4 Total Revenue Increased 48% Year-Over-Year

SAN JOSE, Calif.--(BUSINESS WIRE)--BILL (NYSE: BILL), a leader in financial automation software for small and midsize businesses (SMBs), today announced financial results for the fourth quarter and fiscal year ended June 30, 2023.

“Fiscal 2023 was a defining year for BILL. We exceeded $1 billion in annual revenue, delivered our first year of non-GAAP profitability, and transacted payment volume that accounted for approximately 1% of U.S. GDP,” said René Lacerte, BILL CEO and Founder. “Our solutions are helping more than 460,000 businesses automate their financial operations and gain better visibility and control of their cash flow. With our increasing scale, enhanced platform, and expanding ecosystem, we are uniquely positioned to be the essential financial operations platform for millions of SMBs.”

“In Q4, we delivered strong financial results, including revenue growth of 48% year-over-year and continued expansion of our non-GAAP net income margin,” said John Rettig, BILL CFO. “Our financial performance demonstrated the strength of our durable business model and the rigor of our execution in driving growth and achieving non-GAAP profitability.”

Financial Highlights for the Fourth Quarter of Fiscal 2023:

The financial measures listed below identified as BILL standalone exclude the results of Divvy, Invoice2go, and Finmark.

  • Total revenue was $296.0 million, an increase of 48% year-over-year.
  • Core revenue, which consists of subscription and transaction fees, was $259.5 million, an increase of 33% year-over-year.
    • Subscription fees were $66.9 million, up 21% year-over-year. This includes $57.8 million of subscription fees from the BILL standalone platform, which increased 25% year-over-year.
    • Transaction fees were $192.6 million, up 38% year-over-year. This includes $91.5 million of transaction fees from the BILL standalone platform, which increased 33% year-over-year, and $99.9 million of transaction fees from our Divvy spend and expense management solution, which increased 44% year-over-year.
  • Float revenue, which consists of interest on funds held for customers, was $36.5 million.
  • Gross profit was $243.4 million, representing an 82.2% gross margin, compared to $156.8 million, or a 78.3% gross margin, in the fourth quarter of fiscal 2022. Non-GAAP gross profit was $257.2 million, representing an 86.9% non-GAAP gross margin, compared to $168.5 million, or a 84.2% non-GAAP gross margin, in the fourth quarter of fiscal 2022.
  • Loss from operations was $41.4 million, compared to a loss from operations of $83.4 million in the fourth quarter of fiscal 2022. Non-GAAP income from operations was $42.3 million, compared to a non-GAAP loss from operations of $3.2 million in the fourth quarter of fiscal 2022.
  • Net loss was $15.9 million, or ($0.15) per share, basic and diluted, compared to net loss of $84.9 million, or ($0.81) per share, basic and diluted, in the fourth quarter of fiscal 2022. Non-GAAP net income was $69.4 million, or $0.59 per diluted share, compared to non-GAAP net loss of $3.3 million, or ($0.03) per share, basic and diluted, in the fourth quarter of fiscal 2022.

Financial Highlights for Fiscal Year 2023:

The financial measures listed below identified as BILL standalone exclude the results of Divvy, Invoice2go, and Finmark.

  • Total revenue was $1,058.5 million, an increase of 65% from the prior fiscal year.
  • Core revenue, which consists of subscription and transaction fees, was $944.7 million, an increase of 49% from the prior fiscal year.
    • Subscription fees were $253.3 million, up 31% year-over-year. This includes $217.4 million of subscription fees from the BILL standalone platform, which increased 33% year-over-year.
    • Transaction fees were $691.4 million, up 57% year-over-year. This includes $331.4 million of transaction fees from the BILL standalone platform, which increased 45% year-over-year, and $353.1 million of transaction fees from our Divvy spend and expense management solution, which increased 69% year-over-year.
  • Float revenue, which consists of interest on funds held for customers, was $113.8 million.
  • Gross profit was $864.5 million, representing a 81.7% gross margin, compared to $497.0 million, or a 77.4% gross margin, in the prior fiscal year. Non-GAAP gross profit was $916.9 million, representing a 86.6% non-GAAP gross margin, compared to $542.1 million, or a 84.4% non-GAAP gross margin in the prior fiscal year.
  • Loss from operations was $295.8 million, compared to a loss from operations of $316.8 million in the prior fiscal year. Non-GAAP income from operations was $117.1 million, compared to a non-GAAP loss from operations of $14.7 million in the prior fiscal year.
  • Net loss was $223.7 million, or ($2.11) per share, basic and diluted, compared to net loss of $326.4 million, or ($3.21) per share, basic and diluted, in the prior fiscal year. Non-GAAP net income was $194.4 million, or $1.65 per diluted share, compared to non-GAAP net loss of $24.3 million, or ($0.24) per share, basic and diluted, in the prior fiscal year.

Business Highlights and Recent Developments:

The metrics listed below identified as BILL standalone exclude the results of Divvy, Invoice2go, and Finmark.

  • Served 461,000 businesses using our solutions as of the end of the fourth quarter. This included 201,000 BILL standalone customers, 29,200 spending businesses that used our Divvy spend and expense management solution, and 230,800 subscribers that used Invoice2go. Approximately 7,200 of these businesses used more than one of our solutions as of June 30, 2023.1
  • Processed $69.1 billion in total payment volume in the fourth quarter, an increase of 9% year-over-year. This included $65.1 billion of total payment volume on our BILL standalone platform, an increase of 7% year-over-year, and $3.8 billion in total card payment volume for Divvy, an increase of 42% year-over-year.
  • Processed 23.4 million transactions during the fourth quarter, an increase of 29% year-over-year. This included 11.6 million transactions on our BILL standalone platform, representing an increase of 11% year-over-year, and 11.4 million Divvy card transactions, an increase of 56% year-over-year.
  • As of June 30, 2023, 5.8 million BILL standalone network members have originated or received an electronic payment using our platform, an increase of 23% year-over-year compared to the 4.7 million network members we reported a year ago.
  • Extended agreement with JPMorgan Chase Commercial Banking for Cashflow360, powered by BILL, for another five years.

Financial Outlook

We are providing the following guidance for the fiscal first quarter ending September 30, 2023 and the full fiscal year ending June 30, 2024.

Q1 FY24
Guidance

FY24
Guidance

Total revenue (millions)

$295.5 - $298.5

$1,288.5 - $1,306.5

Year-over-year total revenue growth

28% - 30%

22% - 23%

Non-GAAP net income (millions)

$56.5 - $59.5

$217 - $235

Non-GAAP net income per diluted share

$0.48 - $0.50

$1.82 - $1.97

_________________________
1
Businesses using more than one of our solutions are included separately in the total for each solution utilized.

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

BILL has not provided a reconciliation of non-GAAP net income or non-GAAP net income per share guidance measures to the most directly comparable GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Conference Call and Webcast Information

In conjunction with this announcement, BILL will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss fiscal fourth quarter 2023 results and our outlook for the fiscal first quarter and fiscal year ending June 30, 2024. The live webcast and a replay of the webcast will be available at the Investor Relations section of BILL’s website: https://investor.bill.com/events-and-presentations/default.aspx.

About BILL

BILL (NYSE: BILL) is a leader in financial automation software for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Hundreds of thousands of businesses rely on BILL to more efficiently control their payables, receivables and spend and expense management. BILL’s network connects millions of members so they can pay or get paid faster. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. For more information, visit bill.com.

Note on Forward-Looking Statements

This press release and the accompanying conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements other than statements of historical facts, and statements in the future tense. Forward-looking statements are based on our expectations as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. These statements include, but are not limited to, statements regarding our expectations of future performance, including guidance for our total revenue, non-GAAP net income, and non-GAAP net income per share for the fiscal first quarter ending September 30, 2023 and full fiscal year ending June 30, 2024, our expectations for the growth of demand on our platform and the expansion of our customers’ utilization of our products. These risks and uncertainties include, but are not limited to, macroeconomic factors, including interest rate, inflationary and recessionary environments and SMBs’ heightened sensitivity thereto, fluctuations in foreign exchange rates, instability in the U.S. and global banking systems, the global impact of the ongoing war in Ukraine, the coronavirus pandemic (COVID-19), variants thereof, and their impact on our employees, customers and strategic partners and on supply chains and labor markets, our history of operating losses, our recent rapid growth, the large sums of customer funds that we transfer daily, the risk of loss, errors and fraudulent activity, the market, interest rate, foreign exchange and other conditions that the customer funds we hold in trust are subject to, our ability to attract new customers and convert trial customers into paying customers, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impacts of acquisitions and investments, including our ability to integrate Divvy, Invoice2go and Finmark, our accounting for and internal controls related to acquired businesses’ operating results, changes in staffing levels, the volatility in our interest earned on customer funds, and other risks detailed in registration statements and periodic reports we file with the Securities and Exchange Commission (SEC), including our quarterly and annual reports, which may be obtained on the Investor Relations section of BILL’s website (https://investor.bill.com/financials/sec-filings/default.aspx) and on the SEC website at www.sec.gov. You should not rely on these forward-looking statements, as actual results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof. We assume no obligation to update or revise the forward-looking statements contained in this press release or the accompanying conference call because of new information, future events, or otherwise.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Items excluded from non-GAAP gross profit and non-GAAP gross margin include amortization of certain intangible assets, stock-based compensation and related payroll taxes, and depreciation expense. Items excluded from non-GAAP operating expenses include amortization of certain intangible assets, stock-based compensation and related payroll taxes, depreciation expense, and acquisition and integration-related expenses. Items excluded from non-GAAP net income (loss) and non-GAAP net income (loss) per share include stock-based compensation expense and related payroll taxes, depreciation expense, amortization of certain intangible assets, acquisition and integration-related expenses, amortization of debt issuance costs, accretion of debt premium, and income tax effect associated with acquisitions. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation and related payroll taxes charged to cost of revenue and operating expenses. We exclude stock-based compensation, which is a non-cash expense, and related payroll taxes from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expenses using a variety of valuation methodologies and subjective assumptions while the related payroll taxes are dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of our business.

Depreciation expense. We exclude depreciation expense from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding operational performance. Depreciation expense does not include amortization of capitalized internal-use software costs.

Amortization of intangible assets. We exclude amortization of acquired intangible assets from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding our operational performance.

Acquisition and integration-related expenses. We exclude acquisition and integration-related expenses from certain of our non-GAAP financial measures because these costs would have not otherwise been incurred in the normal course of our business operations. In addition, we believe that acquisition and integration-related expenses are non-recurring charges unique to a specific acquisition. Although we may engage in future acquisitions, such acquisitions and the associated acquisition and integration-related expenses are considered unique and not comparable to other acquisitions.

Amortization of debt issuance costs, net of accretion premium. We exclude amortization of debt issuance costs associated with our issuance of our convertible senior notes and credit agreement and accretion of debt premium associated with our credit agreement from certain of our non-GAAP financial measures because we believe that excluding this non-cash interest expense provides meaningful supplemental information regarding our operational performance.

Income tax effect associated with acquisitions. We exclude the income tax effect associated with acquisitions from certain of our non-GAAP financial measures because we believe that excluding this provides meaningful supplemental information regarding our operational performance.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Free Cash Flow

Free cash flow is a non-GAAP measure that we calculate as net cash provided by (used in) operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs. We believe that free cash flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

BILL HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

June 30,

2023

2022

ASSETS

Current assets:

Cash and cash equivalents

$

1,617,151

$

1,596,542

Short-term investments

1,043,110

1,108,493

Accounts receivable, net

28,233

24,045

Acquired card receivables, net

458,650

256,392

Prepaid expenses and other current assets

170,111

151,258

Funds held for customers

3,355,909

3,142,660

Total current assets

6,673,164

6,279,390

Non-current assets:

Operating lease right-of-use assets, net

68,988

76,445

Property and equipment, net

81,564

56,985

Intangible assets, net

361,427

432,583

Goodwill

2,396,509

2,362,893

Other assets

54,366

47,730

Total assets

$

9,636,018

$

9,256,026

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

8,519

$

9,948

Accrued compensation and benefits

32,901

29,004

Deferred revenue

26,328

31,868

Other accruals and current liabilities

194,733

120,080

Borrowings from credit facilities, net

135,046

75,097

Customer fund deposits

3,355,909

3,142,660

Total current liabilities

3,753,436

3,408,657

Non-current liabilities:

Deferred revenue

410

2,159

Operating lease liabilities

72,477

82,728

Convertible senior notes, net

1,704,782

1,697,985

Other long-term liabilities

18,944

20,803

Total liabilities

5,550,049

5,212,332

Commitments and contingencies

Stockholders' equity:

Common stock

2

2

Additional paid-in capital

4,946,623

4,598,737

Accumulated other comprehensive loss

(4,488

)

(10,217

)

Accumulated deficit

(856,168

)

(544,828

)

Total stockholders' equity

4,085,969

4,043,694

Total liabilities and stockholders' equity

$

9,636,018

$

9,256,026

BILL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands except per share amounts)

Three months ended June 30,

Year ended June 30,

2023

2022

2023

2022(1)

Revenue

Subscription and transaction fees(3)

$

259,510

$

194,820

$

944,710

$

633,365

Interest on funds held for customers

36,473

5,401

113,758

8,594

Total revenue

295,983

200,221

1,058,468

641,959

Cost of revenue

Service costs(3)

41,327

33,269

151,010

105,496

Depreciation and amortization of intangible assets(2)

11,225

10,172

42,967

39,508

Total cost of revenue

52,552

43,441

193,977

145,004

Gross profit

243,431

156,780

864,491

496,955

Operating expenses

Research and development(3)

81,841

66,908

314,632

219,818

Sales and marketing(3)

117,199

102,484

515,858

307,151

General and administrative(3)

73,441

58,686

281,278

241,174

Depreciation and amortization of intangible assets(2)

12,348

12,057

48,496

45,630

Total operating expenses

284,829

240,135

1,160,264

813,773

Loss from operations

(41,398

)

(83,355

)

(295,773

)

(316,818

)

Other income (expense), net

26,264

(970

)

72,856

(13,861

)

Loss before provision for (benefit from) income taxes

(15,134

)

(84,325

)

(222,917

)

(330,679

)

Provision for (benefit from) income taxes

737

617

808

(4,318

)

Net loss

$

(15,871

)

$

(84,942

)

$

(223,725

)

$

(326,361

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.15

)

$

(0.81

)

$

(2.11

)

$

(3.21

)

Weighted-average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted

106,414

104,439

105,976

101,753

______________________________________

(1) Includes the results of Invoice2go from the acquisition date on September 1, 2021.

(2) Depreciation expense does not include amortization of capitalized internal-use software wage costs.

(3) Includes stock-based compensation cost charged to revenue and expenses as follows (in thousands):

Three months ended June 30,

Year ended June 30,

2023

2022

2023

2022

Revenue

$

188

$

$

188

$

Cost of revenue

2,391

1,470

9,111

5,144

Research and development

23,213

16,155

93,364

54,907

Sales and marketing

13,480

23,325

130,421

60,237

General and administrative

18,579

15,826

80,619

76,869

Total stock-based compensation (4)

$

57,851

$

56,776

$

313,703

$

197,157

_______________________________

(4)

Consists of acquisition-related equity awards (Acquisition Related Awards), including equity awards assumed and retention equity awards granted to certain employees of acquired companies in connection with acquisitions, and non-acquisition related equity awards (Non-Acquisition Related Awards), which include all other equity awards granted to existing employees and non-employees in the ordinary course of business. The following table presents stock-based compensation recorded for the periods presented and as a percentage of total revenue:


Contacts

IR Contact:
Karen Sansot
ksansot@hq.bill.com

Press Contact:
John Welton
john.welton@hq.bill.com


Read full story here

First published on Fri, Aug 18, 2023

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